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1. Benjamin Corporation, a growing computer software developer, wishes to determine the required return on an asset Z, which has a beta of 1.5. The
1. Benjamin Corporation, a growing computer software developer, wishes to determine the required return on an asset Z, which has a beta of 1.5. The risk-free rate of return is 7%, the return on the market portfolio of asset is 11%. a) Calculate the required rate of return. b) Demonstrate the overall scenario on SML curve. c) If the risk-free rate changes to 10%, what will be the change in required return and SML curve? Show the work
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